Encouraging Debt With Advertising

In Home Equity Frenzy Was a Bank Ad Come True, The New York Times‘ Louise Story digs up the history on financial advertising encouraging consumers to take on debt – specifically, home equity loans.

Advertising historians look back at the ’80s as the time when bank marketing came into its own. Citigroup led the way by hiring away advertising staff from packaged goods companies like General Mills and General Foods, where catchy ads were more common.

“Banking started using consumer advertising techniques more like a department store than like a bank,” said Barbara Lippert, an advertising critic for the magazine Adweek. “It was a real change in direction.”

Banks thought they were in safe territory. A Merrill Lynch executive, Thomas E. Capasse, told The New York Times in 1988 that home equity loans were safe because bankers believed that consumers would spend the money on wise investments and not “pledge the house to buy a blouse.”